A Solid Correlation Setup Between NZDUSD & AUDUSD

FX:AUDUSD   Australian Dollar/U.S. Dollar
a year ago
We have entered a correlation trade between AUDUSD             and NZDUSD             this evening. The weaker than expected inflation numbers in New Zealand is causing the Kiwi to selloff while the Aussie hangs strong against the US Dollar             .

This news has given us an opportunity to go Long NZDUSD             while Shorting AUDUSD             . The current spread is approximately 120 Pips on the hourly chart. In the past week any time we've seen a spread widen to 100 or more pips it eventually narrows back to 0 pips as the pairs come back into correlation with each other. The pairs have been 70% - 90% correlated during the past year, depending on the timeframe you analyze.

Our algorithm is currently an 82% chance AUDUSD             pulls in while giving us an 65% chance that NZDUSD             rebounds in price.

Please keep in mind this is not the same as entering into a Short AUDNZD             position as one must account for the third economy introduced in this correlation position, the US Dollar             . The US economy (therefore the US Dollar             ) may react to the New Zealand inflation numbers differently than the Australian economy.

Also keep in mind, a correlation trade greatly reduces our DIRECTIONAL RISK. To us it really doesn't matter if we are right or wrong, which way the pairs move, because ounce the correlation narrows and gets back on track close to 70% - 90% we will have a nice profit on our hands.

Here at Unique Forex we combine our team's 40+ years of trading experience with our proprietary algorithm to significantly enhance the trading experience. Utilizing the two, we are able to offer some of the most powerful research on an array of currency pairs. Here you will get all of our research on some of the more popular majors like the EURUSD             , but if you would like to get access to the rest of our research head over to http://www.unique4xpro.com/research.html.
a year ago
Trade closed manually: We went Long NZDUSD @ 0.66280 and Short AUDUSD @ 0.71606 in this correlation trade. Both positions were closed out simultaneously, NZDUSD @ 0.66601 for 32.1 Pip profit and AUDUSD @ 0.71658 for 5.2 Pip Loss. We booked a profit of 26.9 Pips without taking directional risk.
Ideas Scripts Chart
United States
United Kingdom
Home Stock Screener Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Account and Billing Sign Out